Plan B for Biden on student loan forgiveness plan? It might take some time to unfold
WASHINGTON — Immediately after the Supreme Court struck down President Joe Biden’s federal student loan forgiveness plan last month, he launched what has been dubbed as his “Plan B” to salvage the debt cancellation initiative.
Officials, however, warn that the effort could take months to unfold.
Biden, who campaigned in 2020 on the pledge to provide student loan debt relief, now must contend with explaining to voters heading into the 2024 presidential race why his effort was struck down by the court, and why he believes his second attempt will withstand similar legal scrutiny.
Democrats insist the conservative court’s June 30 ruling to invalidate Biden’s pandemic-era debt forgiveness plan will be yet another issue to rally supporters. Republicans counter that the plan, which would have canceled up to $20,000 in federal student loan debt for most borrowers earning less than $125,000, was an overreach of Biden’s executive powers and never should have been dangled before voters.
Political analysts interviewed by Newsday said the court’s ruling and the issue of student debt relief likely will continue to stir debate from both parties during the election cycle.
“It cuts both ways,” Democratic campaign strategist Hank Sheinkopf said. “There are those who will say, ‘Well, see he couldn't do it, he couldn't do it right.’ And those will be the Republicans or people further on the right. And then there will be the Democrats, or the independents who say, ‘Wait a second, the Supreme Court intervened when they shouldn't have, and undercut him. And it wasn't fair and it's not right. And he was trying to do the right thing for young people.’
"So, there's two sides to it," he added. "The question is: Do we know which has more value?”
Biden in a White House speech after the court’s decision in the Biden v. Nebraska case promised he would pursue a “new path” to revive his debt cancellation plan.
The initial plan was launched last August by executive order and would have canceled $10,000 in federal student loan debt for individuals making less than $125,000 annually or households with less than $250,000 in combined income. Pell grant recipients would have received an additional $10,000 in loan forgiveness.
The Biden administration had used the COVID-19 pandemic to justify the executive action, arguing it was covered under the post 9/11 Higher Education Relief Opportunities for Students, or HEROES, Act, which provided debt relief to Americans serving in war or in times of national emergencies.
Last September, the state attorney generals in Nebraska, Missouri, Arkansas, Iowa, Kansas and South Carolina filed a federal lawsuit against the plan, asserting that it was not "remotely tailored to address the effects of the pandemic on federal student loan borrowers," as required by the HEROES Act.
"No statute permits President Biden to unilaterally relieve millions of individuals from their obligation to pay loans they voluntarily assumed," the states wrote in their complaint.
The conservative-stacked court in its 6-3 ruling argued that the administration exceeded the authority allowed under the HEROES Act. Chief Justice John Roberts, in an opinion written on behalf of the court's majority, wrote that the act did not give Education Secretary Miguel Cardona broad powers to outright cancel student loan debt.
"The authority to 'modify' statutes and regulations allows the Secretary to make modest adjustments and additions to existing provisions, not transform them," Roberts wrote in his opinion.
Biden and Cardona since have said they will reboot Biden’s debt plan through provisions in the decades-old Higher Education Act, which they contend give the secretary unilateral authority to set policies related to federal student loans.
White House officials have acknowledged the plan could take months to unfold.
Bharat Ramamurti, Biden’s deputy director of the National Economic Council, told reporters recently that the process to enact a debt cancellation plan through the Higher Education Act will require a more rigorous rule-changing process.
“The negotiated rulemaking process — again, by law — is even more complicated … in that there needs to be public hearings that involve back-and-forth with relevant stakeholders, relevant members of the public. So it's going to take some amount of time,” Ramamurti said.
With federal loan payments set to resume in October after a nearly three-year pandemic pause, the Biden administration has rolled out two other immediate programs that are not expected to face legal challenges.
Once payments resume Oct. 1, the federal government will not penalize borrowers for 12 months with default or notices on their credit reports if they miss their monthly payments during that period.
The administration is also launching an income-based repayment plan, called the Saving on a Valuable Education (SAVE) plan, which will cut monthly payments for undergraduate loans to 5% of discretionary income, compared to the current 10%.
“We're making sure that we're rolling out a plan that's responsible, where people are not going to be asked to pay more than they can afford,” Cardona told reporters at a White House press briefing after the Supreme Court’s decision.
On Friday, the administration also announced it would forgive the debt of more than 800,000 borrowers who are eligible for loan forgiveness under a decades-old, income-based repayment program that long has been plagued with reporting issues. Department of Education officials said those eligible had been making payments over a 20- to 25-year period as required by the program, but some of those payments "were not accounted for."
Conservative lawmakers and groups already have promised to challenge any attempts by Biden to use the Higher Education Act to provide loan relief.
“The executive branch does not have unlimited policymaking power, nor an unlimited bank account to forgive student loan debt,” Ohio Attorney General Dave Yost wrote in a legal brief preemptively filed to the Supreme Court in April asking it to weigh in on the issue ahead of its June ruling. The so-called amicus brief was co-signed by 20 other Republican state attorney generals.
Democrats contend any attempts by Republicans to block Biden’s efforts on the issue will only rally supporters, but political analysts say the issue is not so clear cut, because national polls over the past year have shown that support for the plan was split along partisan lines, with Democrats largely in favor and Republicans opposed.
A poll released by Reuters/Ipsos in April found that 47% of Americans supported Biden's initial debt forgiveness plan, but found 41% did not. The poll of 1,029 respondents had a margin of error of plus or minus 3.2 percentage points.
Christopher Malone, a professor of political science and associate provost at Farmingdale State College, said the court’s ruling “isn’t a watershed issue in a watershed moment,” noting that the issue does not generate the same strong feelings among the electorate as the court’s ruling on abortion last year, but it will still “seep into the narrative about what the election will be about, on both sides.”
“It will become part of that narrative that [Biden] wants to frame, which is that, you know, ‘I stand on the side of working Americans and [Republicans] stand on the side of obstruction.’ The Republicans will use it as another reason to say ‘vote against Biden because he just wants to give away free stuff.’ So, it'll be baked into the narrative, but it's not going to be a super defining issue.”
Sheinkopf said the court’s ruling is one he believes will help increase Democratic turnout at the polls, because it is part of a string of conservative rulings unpopular with Democrats, including last year’s reversal of federal abortion protections and this year’s ruling against the decades-old rules allowing race-based admissions at colleges and universities.
“This will just go on the pile of Democratic anger about abortion, about student loans, about affirmative action, and all the other activities they think the Supreme Court will do to undermine all kinds of liberalizations,” Sheinkopf said.
Sheinkopf, who worked on former President Bill Clinton’s 1996 reelection campaign, said the challenge for Biden is using the court’s decision to rally support among younger voters, a group that is more likely to be saddled with student loan debt, but also a voting bloc that polls show the president is having a hard time reaching.
“The problem with younger voters now is that they’re just not kind of excited about him,” Sheinkopf said. “That has a lot to do with generational differences. Can he be perceived by younger voters as someone who defends them? Yes. But will they turn out is the larger question.”
State Democratic chairman Jay Jacobs, who also serves as chair of the Nassau Democratic Committee, said he believes the issue will help mobilize younger voters.
“For the great overwhelming number of young people, they're pretty tuned in, and I think they know who fought for them and who fought against them, because it's real clear,” Jacobs said. “And so while we will remind them and will seek to energize their vote by reminding them, I'm pretty confident that they're not going to have any confusion when they go to vote in November of 2024.”
Republican campaign strategist Micheal Dawidziak, of Bohemia, said the issue of debt relief “is not a loser for the Republican Party,” noting that GOP officials long have made the case that the plan did not take into account those who opted not to take out student loans. They also contend that Biden, a veteran of Washington politics, should have known the plan would have faced legal challenges.
"If you're somebody who never went to college, is working in a blue-collar job and is struggling to make ends meet, [for Democrats] to tell somebody like that, 'We're going to use your tax dollars to pay somebody's debt that decided to go college' — that's not a losing argument for the GOP," Dawidziak said.
WASHINGTON — Immediately after the Supreme Court struck down President Joe Biden’s federal student loan forgiveness plan last month, he launched what has been dubbed as his “Plan B” to salvage the debt cancellation initiative.
Officials, however, warn that the effort could take months to unfold.
Biden, who campaigned in 2020 on the pledge to provide student loan debt relief, now must contend with explaining to voters heading into the 2024 presidential race why his effort was struck down by the court, and why he believes his second attempt will withstand similar legal scrutiny.
Democrats insist the conservative court’s June 30 ruling to invalidate Biden’s pandemic-era debt forgiveness plan will be yet another issue to rally supporters. Republicans counter that the plan, which would have canceled up to $20,000 in federal student loan debt for most borrowers earning less than $125,000, was an overreach of Biden’s executive powers and never should have been dangled before voters.
WHAT TO KNOW
- President Joe Biden, who campaigned in 2020 on the pledge to provide student loan debt relief, now must contend with explaining to voters heading into the 2024 presidential race why his effort was struck down by the Supreme Court.
Biden has launched an alternate plan to salvage the debt cancellation initiative. Officials warn that the effort could take months to unfold.
Political analysts say the court’s ruling and the issue of student debt relief likely will continue to stir debate from both parties heading into the election cycle.
Political analysts interviewed by Newsday said the court’s ruling and the issue of student debt relief likely will continue to stir debate from both parties during the election cycle.
“It cuts both ways,” Democratic campaign strategist Hank Sheinkopf said. “There are those who will say, ‘Well, see he couldn't do it, he couldn't do it right.’ And those will be the Republicans or people further on the right. And then there will be the Democrats, or the independents who say, ‘Wait a second, the Supreme Court intervened when they shouldn't have, and undercut him. And it wasn't fair and it's not right. And he was trying to do the right thing for young people.’
"So, there's two sides to it," he added. "The question is: Do we know which has more value?”
Biden’s “Plan B” explained
Biden in a White House speech after the court’s decision in the Biden v. Nebraska case promised he would pursue a “new path” to revive his debt cancellation plan.
The initial plan was launched last August by executive order and would have canceled $10,000 in federal student loan debt for individuals making less than $125,000 annually or households with less than $250,000 in combined income. Pell grant recipients would have received an additional $10,000 in loan forgiveness.
The Biden administration had used the COVID-19 pandemic to justify the executive action, arguing it was covered under the post 9/11 Higher Education Relief Opportunities for Students, or HEROES, Act, which provided debt relief to Americans serving in war or in times of national emergencies.
Last September, the state attorney generals in Nebraska, Missouri, Arkansas, Iowa, Kansas and South Carolina filed a federal lawsuit against the plan, asserting that it was not "remotely tailored to address the effects of the pandemic on federal student loan borrowers," as required by the HEROES Act.
"No statute permits President Biden to unilaterally relieve millions of individuals from their obligation to pay loans they voluntarily assumed," the states wrote in their complaint.
The conservative-stacked court in its 6-3 ruling argued that the administration exceeded the authority allowed under the HEROES Act. Chief Justice John Roberts, in an opinion written on behalf of the court's majority, wrote that the act did not give Education Secretary Miguel Cardona broad powers to outright cancel student loan debt.
"The authority to 'modify' statutes and regulations allows the Secretary to make modest adjustments and additions to existing provisions, not transform them," Roberts wrote in his opinion.
Biden and Cardona since have said they will reboot Biden’s debt plan through provisions in the decades-old Higher Education Act, which they contend give the secretary unilateral authority to set policies related to federal student loans.
White House officials have acknowledged the plan could take months to unfold.
Bharat Ramamurti, Biden’s deputy director of the National Economic Council, told reporters recently that the process to enact a debt cancellation plan through the Higher Education Act will require a more rigorous rule-changing process.
“The negotiated rulemaking process — again, by law — is even more complicated … in that there needs to be public hearings that involve back-and-forth with relevant stakeholders, relevant members of the public. So it's going to take some amount of time,” Ramamurti said.
With federal loan payments set to resume in October after a nearly three-year pandemic pause, the Biden administration has rolled out two other immediate programs that are not expected to face legal challenges.
Once payments resume Oct. 1, the federal government will not penalize borrowers for 12 months with default or notices on their credit reports if they miss their monthly payments during that period.
The administration is also launching an income-based repayment plan, called the Saving on a Valuable Education (SAVE) plan, which will cut monthly payments for undergraduate loans to 5% of discretionary income, compared to the current 10%.
“We're making sure that we're rolling out a plan that's responsible, where people are not going to be asked to pay more than they can afford,” Cardona told reporters at a White House press briefing after the Supreme Court’s decision.
On Friday, the administration also announced it would forgive the debt of more than 800,000 borrowers who are eligible for loan forgiveness under a decades-old, income-based repayment program that long has been plagued with reporting issues. Department of Education officials said those eligible had been making payments over a 20- to 25-year period as required by the program, but some of those payments "were not accounted for."
Political impact
Conservative lawmakers and groups already have promised to challenge any attempts by Biden to use the Higher Education Act to provide loan relief.
“The executive branch does not have unlimited policymaking power, nor an unlimited bank account to forgive student loan debt,” Ohio Attorney General Dave Yost wrote in a legal brief preemptively filed to the Supreme Court in April asking it to weigh in on the issue ahead of its June ruling. The so-called amicus brief was co-signed by 20 other Republican state attorney generals.
Democrats contend any attempts by Republicans to block Biden’s efforts on the issue will only rally supporters, but political analysts say the issue is not so clear cut, because national polls over the past year have shown that support for the plan was split along partisan lines, with Democrats largely in favor and Republicans opposed.
A poll released by Reuters/Ipsos in April found that 47% of Americans supported Biden's initial debt forgiveness plan, but found 41% did not. The poll of 1,029 respondents had a margin of error of plus or minus 3.2 percentage points.
Christopher Malone, a professor of political science and associate provost at Farmingdale State College, said the court’s ruling “isn’t a watershed issue in a watershed moment,” noting that the issue does not generate the same strong feelings among the electorate as the court’s ruling on abortion last year, but it will still “seep into the narrative about what the election will be about, on both sides.”
“It will become part of that narrative that [Biden] wants to frame, which is that, you know, ‘I stand on the side of working Americans and [Republicans] stand on the side of obstruction.’ The Republicans will use it as another reason to say ‘vote against Biden because he just wants to give away free stuff.’ So, it'll be baked into the narrative, but it's not going to be a super defining issue.”
Sheinkopf said the court’s ruling is one he believes will help increase Democratic turnout at the polls, because it is part of a string of conservative rulings unpopular with Democrats, including last year’s reversal of federal abortion protections and this year’s ruling against the decades-old rules allowing race-based admissions at colleges and universities.
“This will just go on the pile of Democratic anger about abortion, about student loans, about affirmative action, and all the other activities they think the Supreme Court will do to undermine all kinds of liberalizations,” Sheinkopf said.
Sheinkopf, who worked on former President Bill Clinton’s 1996 reelection campaign, said the challenge for Biden is using the court’s decision to rally support among younger voters, a group that is more likely to be saddled with student loan debt, but also a voting bloc that polls show the president is having a hard time reaching.
“The problem with younger voters now is that they’re just not kind of excited about him,” Sheinkopf said. “That has a lot to do with generational differences. Can he be perceived by younger voters as someone who defends them? Yes. But will they turn out is the larger question.”
State Democratic chairman Jay Jacobs, who also serves as chair of the Nassau Democratic Committee, said he believes the issue will help mobilize younger voters.
“For the great overwhelming number of young people, they're pretty tuned in, and I think they know who fought for them and who fought against them, because it's real clear,” Jacobs said. “And so while we will remind them and will seek to energize their vote by reminding them, I'm pretty confident that they're not going to have any confusion when they go to vote in November of 2024.”
Republican campaign strategist Micheal Dawidziak, of Bohemia, said the issue of debt relief “is not a loser for the Republican Party,” noting that GOP officials long have made the case that the plan did not take into account those who opted not to take out student loans. They also contend that Biden, a veteran of Washington politics, should have known the plan would have faced legal challenges.
"If you're somebody who never went to college, is working in a blue-collar job and is struggling to make ends meet, [for Democrats] to tell somebody like that, 'We're going to use your tax dollars to pay somebody's debt that decided to go college' — that's not a losing argument for the GOP," Dawidziak said.
Laura Figueroa Hernandez is the White House correspondent and previously covered New York City politics and government. She joined Newsday in 2012 after covering state and local politics for The Miami Herald.
'No one wants to pay more taxes than they need to' Nearly 20,000 Long Islanders work in town and city government. A Newsday investigation found a growing number of them are making more than $200,000 a year. NewsdayTV's Andrew Ehinger reports.
'No one wants to pay more taxes than they need to' Nearly 20,000 Long Islanders work in town and city government. A Newsday investigation found a growing number of them are making more than $200,000 a year. NewsdayTV's Andrew Ehinger reports.
